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Food Courts: The recipe of success for malls

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Food courts in shopping malls are a gastronomic destination for shopaholics and foodies alike, enabling the food and beverage industry to gain a competitive edge in the market. Gone are the days when malls were considered only shopping destinations, offering simply multitudes of retail shopping outlets. With the advent of globalization coupled with a well-travelled consumer, shopping malls have metamorphosed into community hubs, providing exceptional experiences to consumers.

Food Courts: The recipe of success for malls
Food courts in shopping malls are a gastronomic destination for shopaholics and foodies alike, enabling the food and beverage industry to gain a competitive edge in the market

One such trend which has become a veritable crowd magnet is the food court. The significance of dining-out as an important form of entertainment is immense, and mall developers in India are taking all possible measures to embrace innovative ways of tempting the consumer into food courts. This makes the food court a win-win experience for all – the mall, the food court operator, restaurant owners and most of all, customers.

Aside from being a major driver of footfalls, food courts represent an integral and even separate retail category today. In the last few years they have emerged as one of the major and consistent sources of revenue for malls. On an average, food courts contribute almost 8-10 percent of the total mall revenue and in case of malls with great offerings in their food courts, this number can even go as high as 15 percent.

F&B Range in Malls

Consumer awareness is growing together with their expectations. Keeping this – and the fact that food is a critically important part of social experience in malls – in mind, mall developers spend a lot on offering a wide range of gastronomic options in their food courts.

The F&B range in a mall typically consists of not only food courts but also QSRs, and other formats like kiosks, cafes, casual dine restaurants, fine dine restaurants and even pubs and lounges.

Food Courts: Good food has an undeniable appeal, especially in a country like India where every occasion, celebration and festivity revolves around food. Shopping centre developers are experimenting with cuisines and formats to woo shoppers. An attractive central eating space serves as a gathering point, and malls have been quick to make food courts as comfortable and as eye-catching as possible for customers. More than just about serving food, the food courts in mall business have acquired greater responsibility of creating an emotional bond with new age shoppers.

Quick Service Restaurants: The operators of QSRs typically offer a standardized menu, with a fast turn-around delivery time. These are especially popular in malls where consumers want to grab a quick bite. Ticket sizes are generally low at these mass-market, self-service, fast food restaurants catering to the general public, but the popularity of the food and fast turnaround time make up for low ticket sizes.

Cafés: Operators generally offer coffee and tea and related beverages, with some type of bakery and small bites. These allow for a longer consumer stay as compared to QSRs, with a low-medium ticket size. This category includes all mass market bakeries, confectioneries and coffee chains along with traditional cafés.

Casual Dining Restaurants: These restaurant operators offer comparatively good quality products available at a medium-high ticket size. While this category includes table service restaurants offering an informal dining experience, they are considerably more formal as compared to cafés and QSRs.

Fine Dine Restaurants: These are full service restaurants with separate meal courses operating on high quality décor and formally themed ambience and specially trained staff. These operate on a high ticket size model.

Pubs & Lounges: Most establishments in this category include restaurants that serve alcoholic beverages along with an array of food options, with significant emphasis on the ambience. This category typically operates on a medium-high ticket size model.

Value Addition: Why Food Courts

The biggest contribution a food court makes to a mall is keeping shoppers around longer. The better the food court, the longer shoppers stick inside a mall and the longer they stay, the more they spend. The longer people stay in the malls, the longer they are inclined to shop. The longer they are inclined to shop, the better the chances of one of their tenants making a sale (or perhaps multiple sales). The better the sales of their tenants, the more rent they are likely to receive.

Being hungry and having nowhere to eat invites people to leave the mall to find food, possibly never to return that day. Food courts are made to avoid such situation. Food courts provide a wide variety of restaurants in the same place within the mall and it is rarest of the possibility that entire food court is packed, and customers don’t get a place to sit.

Constructing a food court is also cheaper and convenient for the mall developers. To provide a separate space for kitchen and other mandatory safety service including electrical and fire appliances for each individual restaurant is a tough task. It eats up plenty of space and also requires investment building spaces for them. Therefore mall developers go for food courts as it is easier and cheaper to build places that require plumbing near each other. Besides it is easy to make a common set up for electrical current for cooking and cooling food.

Apart from these utilities, cleanliness is another important factor. Food service requires much more rigorous cleaning and inspection in comparison to any other segment in the mall. Keeping things at one place simplifies the inspection as well as regular maintenance of the devices. Due to the shared seating, trays and trash collection it becomes much easier to group things together for the entire food court, than to require each place to have separate seating.

Making Success Their Business

Food courts are a quick, relatively cheap, easy way to grab a quick meal or snack, and get back to your shopping. It’s easy for customers to find everything in one place and sample things. Besides, food courts are less in approach, there are no servers and service tantrums. Food once processed, is kept on the counter table and the screen notifies the token/order number. Customers can walk to the counter and pick up their food without paying any tip or so. It is convenient for both the parties.

Food court operators ensure that no two stalls are the same to increase variety and avoid conflict of interest. They ensure quick service, hygiene and cleanliness. Shopping malls often work on a percentage rent basis. This means that the tenant pays a fixed fee for rent. However, there is often a ‘percentage rent’ clause in their lease agreement, which states that if the tenant attains over a certain dollar amount in sales for the month, the amount in excess of this breaker point is subject to percentage. They also rent a premium lot with high traffic and divide the rent among smaller stall operators.

FOOD COURTS: A NEW ANCHOR IN THE SHOPPING MALLS

, Executive Director and CEO, Select Infrastructure Private Ltd. () says, “Over the years, food courts have been playing a key role in increasing footfalls in the shopping centres. These days, consumers are not just looking for international brands, but they are looking forward to holistic experiences ranging from events to food to cafes to pop-up stores etc. According to NRAI, close to 30-35 percent business in a shopping centre is generated through food courts on an average. As organised retail is on a road to progression, food courts are still an important factor of the success and sustenance of shopping malls. At ‘My Square’ food court in , we always focus on giving the best of the culinary delights to our patrons and satiate their gastronomic cravings to the fullest. My Square is an integral part of our shopping centre with almost 20 F&B brands including KFC, PindBaluchi, Café Delhi Heights Comfort, Masala Trail, Khyen Chen, Saravana Bhavan and many more.”

, VP, Quest Properties India Limited says, “Food Courts are now the very nerve centre of a mall. The amount of area consumed by them and the non-stop footfalls they trigger every single day shows why they are the new anchor in a shopping mall.”

, CEO, Creaticity says, “At Creaticity, fine dining is a very large and engaging offering with over 27+ cuisines that can be experienced by customers from Indian, Luckhnowi, Chinese, Italian and many more global cuisines which bring the entire world of cuisines on one platter at Creaticity. Shopping and food go hand in hand. While Home & Interiors and fine dining are mutually exclusive, conversions of home interior clients to fine dining are almost 80-90 percent considering the average time spent of 2.5 hours on home shopping. Added to that is entertainment, which offers a unique cutting edge that differentiates Food City at Creaticity from the rest. Food has always been an integral part of Indian palette and the mix that we offer ensures global offerings under one roof.”

, Senior Vice President- Marketing, adds, “A storm of global trends has changed the role of the shopping centre’s operations. Presently, when customers visit shopping centres, they are searching for experiences that go well past conventional shopping. A customer is the centre point in all our engagements and advancements moreover is known for providing what customer wants. The ever-evolving mall culture has brought about changes that have grown apart from the accustomed ways. The food court is one such change that is seen as an experiential retail strategy and widely accepted by both the developers and the customers. ’s food court has significant influence in every day footfall. Food Court in our mall reflects attributes that make it a perfect fit as an anchor tenant which builds the property’s demand by engaging traffic and increasing customers.”

Mahim Singh, Mall Head, The Great India Place and Gardens Galleria adds, “Food court has always been one of the busiest places in the mall. They can be seen as a number of restaurants, bars and more under one roof and play to the trend of food lovers seeking high-quality ingredients in a more casual setting. Menus are smaller and for restaurant owners, costs are lower. According to an estimate by a real estate consulting company, over 320 new malls are coming up across India by 2020 and food courts are emerging as one of the top anchor tenants. (In retail industry parlance, anchor tenants are those stores that have the largest space, visitors and revenues in the mall.) Talking about The Great India Place, we have a standalone food court on third floor has more than 20 restaurants and is so busy that customers even have to stand guard over a table to make sure they get it next.”

Mukesh Kumar, CEO, expresses, “Food courts in shopping malls are the gastronomic destination for shopaholics and foodies alike that are playing a pivotal role in increasing footfalls in shopping centres. With the trend of eating out on the rise, it is natural that malls would like to use this important category.”

Paresh Mishra, Mall Retail Head, Korum Mall stated, “Retail as an industry has seen a sea of change in recent years thanks to the surge of e-commerce. Shopping has now become a matter of convenience rather than a wholesome indulgence. In this era of e-commerce, where people are actively shopping online from a plethora of available options, malls have started losing their novelty as shopping destinations. To keep attracting spenders, malls have started focusing on providing relevant food delicacies and Retailtainment centers, which an e-commerce portal cannot provide. Need for these have seen a constant surge in the recent times, mainly because of factors like rising disposable incomes, paucity of quality time with family and dear ones, exposure to latest trends and things to do – by virtue of social media and apps, a strong desire to try out new things and heightened aspirations. Now food courts are taking the onus of attracting footfalls to malls and have become the new anchors.”

, Business Head, Lulu Mall says, “65 percent of India’s population constitute the Generation Y or Millennials, who are in the age group of 18-35 years. The per capita income of Indians has increased, and there are more working people/ couples per household. With more disposable income in hand, they have higher spending power on food. These young Indians spend 3X as much on restaurant visits than on any form of entertainment, including cinema, travel and other recreational activities. Hence, over the years the food court of a mall has elevated from a secondary role, piggy banking on shopping to a more central one, where food draws in footfalls and shopping complements. With increased online shopping, the only experience a person can’t purchase digitally is the feeling of togetherness while eating out and spending time together with one’s family. Shopping malls today are focussing on providing just that and dedicating even up to 20 percent of leasable space for food courts and restaurants.”

, Chief Leasing Officer, says, “We look at food courts as a significant part of completing the mall experience. While mall developers are increasingly trying to offer a complete shopping plus entertainment package to new age shoppers, food court is becoming one of the most crucial elements in it. The food creates important interaction point for people to come together. Malls have become a part of the weekend ‘going out’ option and we like to complete that experience where people can bond over food with varied options.”

, Executive Vice President & Head – DLF Shopping Malls says, “Food courts within malls has undergone a remarkable transformation in the recent past, not only in terms of the size of the sector but also the diversity and quality of offer. The amount of space dedicated to the food service sector across the global retail landscape is clearly increasing each year, as the growth in online sales continues apace. The demand for food service space appears to be insatiable. Well-configured and complementary dining and socializing provision is one of the most effective ways of incorporating diversity and vitality into malls worldwide. A vibrant and evolving food service offer can differentiate retail spaces, and as part of an integrated, broader leisure offer, can help meet the ever changing consumer demand and expectation for experience, as well as provide consumers with a reason to keep coming back. The future for the food service sector is bright, but as it grows up, so the need grows to apply greater rigor and science to planning and executing foodservice strategies.”

Arijit Chatterjee, COO, Junction Mall, Durgapur stated, “Today, F&B outlets at shopping malls have become venues for social and economic interaction. The food court has replaced large department stores to become central in a mall’s development. Over the last few decades F&B operators have increased the amount of floor space they take up in shopping centers from 7 percent to 15 percent, according to a new research. Now the myth of having a food court at a higher level has changed and instead latest trends demand that one F&B engage point be planned on every floor, with multiple exposure points. With increase in competition from online retailing, F&B has become a main ally of retail along with entertainment options in achieving business objectives, since food courts attract consumers of all ages throughout the week, making a mall a one-stop-family-destination.”

Munish Khanna, Chief Revenue Officer, Express Avenue explains, “The next anchor at a mall is a food court. No two ways about it. There is visible trend to be seen of food lovers seeking new age brands, high-quality ingredients in a more casual quirky and a fun setting in a food court type of environment. It is becoming increasingly evident that food is becoming the most important driver in malls attracting shoppers to choose from which mall to visit basis the food court & F&B mix. Foodgasm is the new mantra for all malls to seduce/attract the shoppers/footfalls.”

Sahil Saharia, Chief Executive Officer, Bengal Shristi, says “F&B options and FECs are becoming the main drivers of footfalls in malls with food courts contributing majorly to the revenue.”

A statement released by Inorbit Malls reads: “Malls are no longer perceived as shopping venues. They have evolved as social places where people come to relax and unwind amidst their busy lives. Today malls are embracing food and entertainment as an important driver by giving substantial square footage space to concepts like open cafés, pubs etc. Since customers enjoy coffees, family brunches and group get-togethers at the mall. Talking on the F&B experience, we are happy to announce launch of our new project The Orb at the JW Marriott Sahar Annexe Retail Arcade. The project is a mixed used development with JW Marriott Hotel, Banquets, Retail and Commercial all under one roof. The Orb will be Mumbai’s first integrated F&B destination that will re-define socialising, dining and partying in Mumbai. It will house 27 outlets comprising restaurants, cafes, lounge bars, a night club, a salon, and 25 specialty kiosks.”

Conclusion

As the mall culture continues to grip the country and the business of malls becomes more evolved, food courts are going to be an interesting segment where interesting activities can be noticed. In the coming years, with more numbers of professional players coming up as specialized food court operators, mall developers entering the food court business the category will have a lot to watch out for.